Offshore and the new international political economy

Abstract

Offshore finance provides an incubator and testing ground for propositions concerning fundamental debates in international political economy. The common feature among offshore financial products is calculated ambiguity: the ability to give diametrically opposed but legally valid answers to the same question from different quarters. Thus offshore allows individuals and firms to enjoy simultaneous ownership and non-ownership, to be high profit and loss-making, heavily indebted but also debt-free, and for investment to be foreign and domestic. The advantages conferred to individuals and firms, however, tend to undermine the stability of the financial system. Using indirect governance techniques, transnational networks of regulators have sought to coercively simplify offshore finance, with mixed results. Focusing on ambiguity as central to offshore finance complements earlier theoretical treatments of this realm from law, anthropology and international relations. Empirically, the recently enhanced surveillance of offshore centers has produced new data facilitating future quantitative studies,which complement more anthropological approaches to this subject.